SAN ANTONIO-Strengthening the credit union's relationships with local auto dealers should be a 2010 strategic priority, insists one industry expert, who is forecasting an auto loan boon for CUs when the economy recovers.
Mark Hein, CEO of SWBC's credit union division, believes that CUs are positioned to see their auto loan portfolios spike as a result of the progress they've made during the recession. Hein said CUs have benefitted from manufacturer financing pullbacks and from positive press they have received as banks stumble.
"I don't think I have ever seen credit unions get so much good press as they have in the last year," said Hein, who also noted that CUs' share of the auto loan market has increased significantly. "I think credit unions may be near 30%, and that's up at least 10 percentage points from before the economic problems."
What that means, Hein said, is that credit union auto loan portfolios have remained stable and grown by claiming a larger share of a shrinking market. That business will grow exponentially as the auto loan market rebounds, he explained. "That's why it's so important now for credit unions to cultivate strong relationships with dealers and make that a priority in strategic planning. Because dealers often view their relationships with financials as, 'What have you done for me lately.'"
According to Hein, other important areas to pay attention to in planning sessions are business lending - made more attractive by the Small Business Administration increasing loan guarantees to 90% - and fee income. "In good times when credit unions did not have to worry about maximizing every dollar, they were less concerned about generating fee income through the sale of ancillary products like GAP or service contracts," Hein said.
For info: www.swbc.com
